Pancreatic cancer is one of the most lethal cancers in humans. While immunotherapy clearly holds promise in this disease, it has been ineffective in most patients partly due to immunosuppression associated with regulatory Myeloid Derived Suppressor Cells (MDSC) and regulatory T cells (Tregs). Tumor-induced MDSC and Tregs are known to suppress anti-tumor immune responses. However, the molecular events controlling this process are not fully known. Src Homology Inositol Phosphatase (SHIP-1) deficient mice showed an expansion of MDSC and Tregs that negatively affect anti-tumor immunity. SHIP-1 expression is regulated by cytokines. In addition, SHIP-1 expression is developmentally regulated in T cells. Activated T cells induce MDSC expansion and function, however the mechanisms are yet unknown. Our preliminary data in a pancreatic TB model revealed that suppression of SHIP-1 protein expression is associated with the expansion of MDSC and Tregs, in vivo. However, we discovered that SHIP-1 expression was restricted to T-cells suggesting that the effects on MDSC accumulation may be indirect. The long-term goal of this proposal is to elucidate the role of SHIP-1 regarding the molecular interaction of MDSC and Tregs in a pancreatic tumor microenvironment. We hypothesize that pancreatic tumor-derived factors (TDF) suppress SHIP-1 expression in Tregs, which enable these Tregs to induce the activation and expansion of MDSC thus altering their function in pancreatic tumor microenvironments. Therefore in order to test our hypothesis, the following aims are proposed: Specific Aim 1. To evaluate the effect of pancreatic tumor derived factors (TDF) on nave T cell polarization into Tregs and their expression/activity of SHIP-1, in vitro. Specific Aim 2. To elucidate the molecular mechanism(s) by which TB Tregs induce MDSC in an orthotopic animal model of pancreatic cancer and in a spontaneous transgenic model of pancreatic cancer.